Following the first hearing by the Delhi High in the matter of funding of political parties by Public Sector Companies and foreign sources where the court asked the Ministry of Home Affairs and Election Commission of India to submit their responses, today the second hearing took place in the court headed by justice S K Kaul. ECI and MHA submitted their responses before the court.

Following are the highlights of the today's court proceedings:

Press Note

Date: 4th February
2013

ECI confirms that it wrote to MHA on two
occasions complaining about the funding of Political Parties by government companies
and foreign sources

Delhi High Court issues notices to Centre,
ECI, INC & BJP

A bench of Delhi High Court comprising of justices
Sanjay Kishen Kaul and Indermeet Kaur today, on 4th of February 2013, heard for
the second time the arguments of a PIL that has alleged that the two political
parties namely Indian National Congress (INC) and Bhartiya Janata Party (BJP)
have violated the Representation of People’s Act (RPA) 1951 and Foreign
Contribution (Regulation) Act (FCRA) by taking donations from government companies and foreign sources,
which is prohibited under both the legislations.

In the first hearing the Delhi High Court had asked
the Central Government (Home Ministry) and Election Commission of India (ECI)
to file their responses within 2 weeks following the first hearing on 10th
January 2013.

Petitioner of the PIL

a)Association
for Democratic Reforms (ADR)

b)Dr.
EAS Sarma, former secretary to the Government of India

Responses from ECI

a)ECI
has responded in its submission to Delhi High Court on the issue of foreign
sources of funding to INC and BJP that as per the existing provisions of
section 29B of Representation of People’s Act 1951, no political party shall be eligible to accept any contribution from
any foreign source defined under clause (e) of Section 2 of the Foreign
Contribution (Regulation) Act, 1976

b)ECI
has submitted in its response that the
commission is not an investigating agency and it cannot detect from the
contribution reports (that they have to submit to the ECI under rule 85B of the
Conduct of Elections Rules, 1961 in order to secure the tax relief) of political
parties as to which sources of funds belong to foreign companies or their
Indian subsidiaries.

c)ECI
has further stated that the onus of investigating and taking of punitive action
against any offence committed by political parties, or the PSUs or the corporate lies with Government of India

d)ECI
has also stated in its affidavit to the court that it wrote to Ministry of Home Affairs (MHA) on 28th September
2012 where the commission forwarded the complaints that it received about
the foreign sources of contributions that political parties have received.

MHA haven’t responded despite the 2 letters
from ECI

After MHA failed to respond
to ECI in any manner, ECI wrote another letter on 11th January 2013
requesting for a response to its earlier letter and also asked MHA whether any
action had been taken in that regard. MHA also mentioned in the court that Congress
has submitted the response but BJP is yet to file theirs.

MHA’s dilly-dallying in the court

In its response
MHA has confessed in the court that the ministry has received the complaints
from the ECI and that they have called upon the Congress and BJP to furnish
their responses in this regard.

Petitioners’ agrument

Prashant Bhushan insisted
in the court that Union of India is dragging its feet because the political parties
that run the Government have themselves committed serious criminal offences. He further said that since there is an inherent
conflict of interest in this matter this investigation should be conducted by an
independent authority.

Court issues notices

Concluding the hearing
today, the bench issued formal notices to the Union of India, the Election
Commission and to the Congress and BJP and asked them to reply within 3 weeks.
The Bench also asked the Union of India to take a final decision and action on
the issue within the next 3 weeks and file a fresh affidavit.

Grounds of the PIL

INC
and the BJP have violated Section 29B of the Representation of People’s Act
1951, which categorically prohibits them to take donations from government
companies and from any foreign source

The
donation of huge sums of money made by the Vedanta Group (being a foreign
company) to major political parties like INC and BJP is in clear violation
of the FCR Act of 1976 and the FCR Act of 2010.

The
donation of huge sums of money by the public sector undertakings
(who are also State within Article 12 of the Constitution) to the political
parties is in violation of Section 293A of the Companies Act.

BJP and INC have
confessed to the foreign funding

Both
BJP and INC have themselves declared, in their annual contribution reports
submitted to the Election Commission of India (ECI), that they have received
funding from the Vedanta Group, which is a foreign company listed on London
Stock Exchange under the name “Vedanta Resources PLC”.

All the documents related
to this PIL can be accessed on ADR website www.adrindia.org